Alpha, 11 percent owned by the country’s bank rescue fund HFSF, reported net earnings from continuing operations of 65.2 million euros ($76.06 million) after a net loss of 64 million euros in the fourth quarter of 2017.

Greek banks are scrambling to shrink their problem loan portfolios and meet targets agreed with regulators. Problem loans increased sharply when borrowers found it hard to keep up debt payments during the country’s long recession which pushed unemployment to record highs.

So-called non-performing exposures (NPEs) are the biggest challenge facing the banks. Based on Bank of Greece data at the end of December, NPEs stood at 95.7 billion euros or 43.1 percent of banks’ overall loan book.

“We delivered a profitable performance despite headwinds on net interest income and elevated cost of risk charges,” CEO Dimitris Mantzounis said in a statement, referring to the loan impairments.

“Our funding profile improved significantly as we continued towards the elimination of ELA support, while we reduced the stock of NPEs, outperforming our business plan targets,” he said.

Its ratio of non-performing loans (NPLs) - credit past due for more than 90 days - edged higher to 35.2 percent of its book from 34.9 percent at the end of December.

The bank booked trading gains of 186 million euros, mainly on its Greek government bonds portfolio. But net interest income fell 8 percent year-on-year as lower contributions from the asset side more than offset decreased funding costs.

Alpha’s NPE ratio stood at 51.8 percent at the end of March, while borrowing from the Greek central bank’s emergency liquidity facility (ELA) was reduced by 2.2 billion euros to 4.8 billion at the end of the first quarter and to 3.0 billion in May. ($1 = 0.8572 euros) (Reporting by George Georgiopoulos. Editing by Jane Merriman)